Maine asked to refund federal government $9.2M for overbilling Medicaid

AUGUSTA, Maine — The federal government wants Maine to repay more than $9 million that the Department of Health and Human Services overbilled in the Medicaid program over four years.

Maine splits the bill for the health insurance program, which covers low-income and disabled residents and is known as MaineCare in the state, with the feds. From 2005 to 2009, DHHS used an erroneous federal match rate and overbilled the Centers for Medicare and Medicaid Services by $9.2 million, according to a report by the U.S. Department of Health and Human Services’ Office of Inspector General, which investigates fraud, waste and abuse in the department’s programs.

The state is negotiating with the federal government to lower the refund amount.

DHHS used the wrong federal match rate on 90 percent of the 637,057 claims that the inspector general reviewed, according to the report. The errors occurred as DHHS adjusted previously paid claims from health care providers to reflect changing federal match rates.

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The federal match can fluctuate based on a state’s per capita income and other factors.

The match rate fluctuated frequently with the influx of federal stimulus money, according to Stefanie Nadeau, director of MaineCare Services. The overbilling occurred under the state’s previous claims processing system, which since has been replaced, she said.

DHHS is looking for the feds to weigh in on whether the current claims system is properly calculating the match rate, Nadeau said.

“We want to make sure the way we configured our system today is appropriate,” she said.

While DHHS overbilled for some claims during the four-year audit period, it may have underbilled the federal government since 2009 as the match rate dropped and stimulus funds dried up, Nadeau said. The department is looking to settle on a refund amount somewhere in the middle, she said.

Once state and federal officials reach a figure, repayment options will be sorted out, Nadeau said.

The Office of Inspector General conducted fieldwork at DHHS from December 2011 to March 2012, according to the report. The Legislature has been periodically updated on the audit’s progress since last fall, Nadeau said.

The $9.2 million represents about 1 percent of the roughly $750 million the state spent on its share of Medicaid costs in fiscal year 2012.